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Partial Government Shutdown

As the partial shutdown of the federal government drags on, there is plenty of blame to go around. It is causing financial problems for furloughed workers who can’t refinance their mortgages or buy homes because lenders can’t verify their income, and for 90 percent of IRS employees (viewed as nonessential). NLC is open for business and our Personal Mortgage Advisors are dedicated to guiding our clients who are buying a home or refinancing through the loan process.

The 800,000 unpaid federal employees aren’t the only ones running into problems. Mortgage application numbers have been bouncing around, and borrowers who were sitting on the fence have taken advantage of the drop in mortgage rates to lock in a loan. But furloughed workers can’t lock those rates in. Anyone relying on federal agencies to verify income taxes or obtain certain loan information from the FHA is in trouble: it remains mostly closed. Rural home loans guaranteed through the Department of Agriculture are on hold, too. Real estate agents have deals on hold. Many government contractors’ pay is on hold.

The Treasury Department restarted a program that had been sidelined by the partial government shutdown, allowing IRS clerks to collect paychecks as they process IRS income verification requests. (Supposedly the IRS started the program again by using fees paid by companies that provide the transcripts to lenders.)

The longer the shutdown, the more uncertainty there is with borrowers, and with consumers around the nation. Regulators have recommended that Fannie, Freddie, FHA/VA and USDA (Farm Service Agency and Rural Housing Services) should consider the immediate development and announcement of a loan modification/forbearance program for affected federal employees/contractors that would take the loans for such employees out of the normal delinquency, default, F/C cycle for an extended period.

If you think this is bad, 2019 is expected to contain several initiatives and programs that the government must agree upon. If they don’t, well, there will be lots of inconveniences ahead of us. NLC’s Personal Mortgage Advisors are knowledgeable about programs that are less dependent on agencies within the government impacted by the partial shutdown. We are funding loans

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